Each year, Centers for Medicare & Medicaid Services (CMS) issues the Notice of Benefit and Payment Parameter (NBPP), proposed rules and regulations that will guide the Affordable Care Act individual insurance market for the upcoming plan year. In our third blog post on the plan year 2024 NBPP, we point out some of the more nuanced proposed changes including how exchanges should conduct annual renewals, manage consumers who are aging out of their parents plans, and refining the administrative work surrounding data matching inconsistencies.  

Auto-Renewal Changes 

Each year, consumers enrolled in an exchange plan can opt to automatically re-enroll in coverage rather than having to actively select a plan year after year. Health plans change from year to year, so often a consumer needs to be re-enrolled in a different, yet similar plan. Currently, the individual’s metal level is one of the main factors taken into consideration regardless of their eligibility for tax credits and/or cost-sharing reductions (CSRs). CMS is proposing the following changes to this process that would apply to all exchange types for Plan Year 2024. 

Bronze Level Plans 

CMS is proposing changes to this process for some consumer segments beginning PY2024, which would apply to all exchange types: Healthcare.gov, state-based exchanges on the federal platform, and state-based exchanges. The changes proposed allow for consumers currently enrolled in bronze level plans without CSRs, but who are eligible for cost sharing reductions, to be automatically re-enrolled in a silver-level qualified health plan (QHP) with CSRs. The plan is required to be within the same product type (HMO, PPO, POS, etc.) and with a lower or equivalent premium.   

Discontinued Plans 

In instances where silver level plans are discontinued, CMS is proposing consumers are re-enrolled into plans with the most similar network to the plan they had in the previous year, provided that certain conditions are met, such as the plan must be within the same product type (HMO, PPO, EPO, etc.) and it must have a lower or equivalent net premium. 

CMS is also proposing to allow Exchanges to incorporate provider network information when adjusting the auto-renewal hierarchy.   

If meeting this requirement is not feasible for PY2024, CMS proposed to begin this process for the PY2025 open enrollment coverage year. 

Preventing Mid-Year Terminations for Young Adults Who Turn 26  

Under the Affordable Care Act (ACA) a dependent child can remain on a parent’s health plan until age 26. Currently, the covered child’s health plan terminates on their 26th birthday, exposing the adult child to potential coverage gaps. Requirements have been proposed that would prohibit issuers participating in Exchanges from allowing mid-year coverage terminations of on-exchange plans, keeping the child enrolled through the end of the plan year.  

Data Matching Inconsistencies (DMIs)  

Failure to Reconcile 2023  

Currently, exchanges must conduct data validation with the Internal Revenue Service (IRS) to confirm if an enrollee has reconciled previously received Advance Premium Tax Credits (APTC). It is proposed that states on the federal platform, whether full federally facilitated exchanges (FFE) or state-based exchanges operating on the federal platform (SBE-FP), refrain from taking adverse action against consumers who have failed to file tax returns and reconcile a previous year’s Advanced Premium Tax Credit (APTC).   

Additionally, CMS is proposing that starting in PY2024 states may only begin to take adverse action on enrollments that have a Failure to Reconcile (FTR) flag, after two consecutive years of such flags.  

Income Inconsistencies   

CMS is proposing two changes to how the exchange handles and processes income data matching issues (DMIs). Currently, an exchange must verify a consumer’s income with the IRS; if the IRS indicates that there is no data on file, the consumer must provide proof of income within a specified time in order to maintain their enrollment with financial assistance. The proposed rule would now require Exchanges to accept attested consumer income when the Internal Revenue Service (IRS) confirms there is no such data available. Currently, consumers who receive a DMI have 60 days to provide necessary documentation to the Exchange. The proposed rule would extend that timeframe to 90 days.